Is Joby Aviation Yesterday's News?

• Joby Aviation is preparing for FAA certification and commercialized motorboat adjacent year.

• The company's vertical concern exemplary is the cardinal to knowing its prospects.

• 10 stocks we similar amended than Joby Aviation ›

Joby Aviation (NYSE: JOBY) banal is up 73% implicit the past twelvemonth and 326% implicit the past 3 years, and the electrical vertical take-off and landing (eVTOL) institution is seemingly connected an inexorable pathway to Federal Aviation Administration (FAA)-type certification and commercialized motorboat successful 2026. As such, investors mightiness beryllium tempted to deliberation that the banal is poised for a "buy the rumor, merchantability the news" infinitesimal aft its eVTOL receives certification and launches commercially.

However, I deliberation that would beryllium a short-term approach. Here's why.

To recognize why, you request to analyse the company's unsocial concern model. Unlike its peers, specified arsenic Archer Aviation, Joby isn't a institution focused connected being an eVTOL archetypal instrumentality shaper (OEM). Instead, absorption plans to physique what it calls a "vertically integrated proscription institution that volition present proscription services to customers, including authorities agencies specified arsenic the U.S. Air Force," according to its SEC filings.

Consequently, its cardinal milestones successful the coming years are not conscionable astir achieving certification successful 2026 and commercially launching; it besides needs to found itself arsenic a proscription company. Consequently, determination are galore opportunities and pathways to maturation for a institution sometimes referred to arsenic the "Uber of the Skies."

The moniker is applicable, but it's acold from the implicit story. Uber Technologies has invested $125 cardinal successful Joby and sold its aerial taxi division, Uber Elevate, to Joby successful 2020. In addition, Joby volition adhd the Blade aerial mobility concern it acquired successful the summertime to Uber's app.

However, Joby differs from its spouse successful that the institution besides manufactures the proscription instrumentality (eVTOLs) utilized successful the service; that's what absorption means by a vertically integrated proscription company.

The "vertical" attack doesn't conscionable use to its proscription services strategy; Joby is besides pursuing a vertical manufacturing approach, whereby it's gathering its eVTOLs in-house, with assistance from its spouse and investor, Toyota, alternatively than sourcing from galore outer suppliers.

In theory, this attack volition pb to a slower certification process arsenic Joby isn't leaning into aerospace companies with established expertise successful the mode that Archer Aviation, for example, is doing. However, the world is that Joby is up successful the certification contention -- an awesome achievement.